Honda to have 700 dealerships in China by year-end

Shanghai, May 8 (Gasgoo.com) Honda Motor Co., the second-largest Japanese automaker by sales, will increase its dealerships in China to 700 by the end of 2008 and boost its annual production capacity by about 20% to 650,000 units, the Nikkei reported on Thursday.

Honda currently has three sales networks with a total of 560 dealers across China, where the Japanese company plans to add another 140 dealerships by the end of this year. Guangzhou Honda will expand its sales sites by 24% to 450 while Dongfeng Honda will increase dealerships to 230. Honda also aims to increase the number of stores selling the Acura luxury brand from eight to 20.

Dongfeng Honda will spend around 10 billion yen ($95.4 million) to raise annual capacity from the current 120,000 units to 240,000 units as early as this year, the report said. Honda manufactures vehicles in China at the two subsidiaries (Guangzhou Honda  and Dongfeng Honda), whose capacity totals 530,000 units a year.

The automaker plans to sell around 490,000 units in China alone in 2008, up 15% from 2007. However, sales in Japan declined 7%, the sixth straight year-on-year decrease .

Honda warned that business in the 12 months through March 2009 would be weak due to a stronger yen, rising materials costs and a weaker U.S. auto market.